Land acquisition bill - Revised Draft to Parliament

The government has defended its new land acquisition bill as industry-friendly, refuting criticism that provisions contained in the legislation were retrograde and would push up costs for state-run and private companies.

Industry groups had slammed the new Land Acquisition, Rehabilitation and Resettlement Bill (LARR) 2011, cleared by the cabinet earlier this week and tabled in parliament on Wednesday, saying it was "burdensome" and "anti-development".

But Rural Development Minister Jairam Ramesh, whose ministry drafted the bill, said: "There were concerns by industry associations and some of my colleagues and these have been reflected in the bill. Some of the provisions in the earlier draft were felt to make land acquisition very costly. It is a difficult law, aims at a difficult balance but I feel now we have struck the right balance."

However, Geetamber Anand, Managing Director of ATS group and Vice-President, Credai said: "The changes in the rehabilitation will help but we still maintain that where private sector acquires land, they do so at prevailing market prices wherein the land seller's rehabilitation is taken care of already."

The minister pointed to the relaxed rehabilitation and resettlement provisions which make the annuity entitlement an alternative to providing employment or offering Rs 5 lakh per family. The provision of annuity of Rs 2,000 per month per family for 20 years was earlier a mandatory clause, along with provision of employment for one person per affected family.

Another key change is that in every transfer of land on which development has not taken place 20% of the appreciated value will have to be shared with the original owner. In the draft this clause applied to developed land as well.

The cabinet had earlier scaled down compensation for acquired rural land to four times of the stamped value, instead of six times, while maintaining the compensation for urban land at two times the stamped value.

The controversial blanket ban on acquisition of multi cropped irrigated land has also been tweaked by the cabinet to allow acquisition of up to 5% such land in a district as a "last resort", with the rider that an equal area of wasteland within the district will have to be developed.

However, there will be no riders for acquisition of such land for linear infrastructure projects such as railways, highways, district roads, power lines and irrigation canals. The bill does not specify the role of state and the private sector in land acquisition and has given states the freedom to formulate their own land acquisition laws within the framework of the central legislation.

However, the central legislation will set up the minimum limit for compensation. The provisions will be applicable to private purchase of land of over 100 acres in rural areas and 50 acres in urban areas.

The bill, which seeks to replace the law dating back to 1894, seeks to put in place a central legislation for rehabilitation and resettlement for the first time.

Source: ET 8/9/2011

Companies and states oppose Land Acquisition Bill

It's not only the industry, even the state governments are opposing the proposed land acquisition bill, which if implemented, will push up the cost of projects manifold. The chief ministers have scheduled a meeting to discuss the bill and forward their suggestions to the central government.

If the proposed bill is made into a law, it will be a severe setback to industrial, infrastructure and urbanization projects, top officials from real estate, construction and manufacturing sectors said at the World Economic Forum.

It was felt that there is a strong need to overcome the trust deficit between the government, businesses and civil society. There was also the need to have a constructive dialogue between land sellers and buyers to overcome land-based conflict that could lead to an equitable growth, the panelists agreed.

Majority view was that if the new bill is passed, both, the private sector and the government projects would become difficult to implement since the cost of land acquisition will rise by multiples since the bill proposes the purchase price to be at least six times the current market price. "Even the government will find it very tough to carry out even infrastructure projects," said Ratnakar Gaikwad, chief secretary, Maharashtra. However, he asserted that most projects are built on marginal, un-irrigated land, and said fertile land is not generally acquired.

Ajit Gulabchand, CMD, Hindustan Construction Company, feared that if the consent of 80% of those likely to be affected by a project is to be obtained before acquiring a land, the whole process of land purchase can carry on indefinitely.

Navin Raheja, MD, Raheja Developers, raised the issue at a session with chief ministers and said the proposal in the draft bill will make projects unviable. The chief ministers including Prithviraj Chavan of Maharashtra, acknowledged the problem and assured a patient hearing.